Dealbreaker.com has reported on rumours of 'bonus panic' at the Credit Suisse investment banking office in New York. And it's apparently all because of those losses said to have been sustained in South Korean derivatives in the third quarter.
Bloomberg broke the original story of the alleged losses earlier this month. Putting the figure at around $120m, the loss is said to have represented around 13% of Credit Suisse's revenues from equity trading in the period. But Dealbreaker quotes an unnamed source who puts the loss much higher. Although a report of losses of up to $900m from the trades are thought to be nonsense, a Dealbreaker 'insider' is said to have suggested that the losses may be twice as high as the $120m figure originally banded around.
Some Credit Suisse bankers are said to be going around with that anxious look on their faces (signs of Bonus Anxiety Disease ?), and are now believed to be worried that the derivative losses could be bad news for bonuses all round. Some are thought to have been already dusting off their cvs, fearing the worst (no point in staying around if bonuses look tight).
Well, Credit Suisse staff won't have long to wait to find out if there's any truth in these rumours. The investment banking unit third-quarter results, along with the rest of Credit Suisse Group, are out on Thursday. Bloomberg quotes analyst estimates which suggest that the securities unit may post a 30% 'slump' in earnings.
Source - Dealbreaker.com